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Pamulaparthi Venkata Narasimha Rao ( ) (28 June 1921 – 23 December 2004), who was commonly known as P. V. Narasimha Rao, served as the 10th Prime Minister of the Republic of Indiamarker. He led one of the most important administrations in India's modern history, overseeing a major economic transformation and several incidents affecting national security. Rao accelerated the dismantling of the license raj. Rao, also called the "Father of Indian Economic Reforms," is best remembered for launching India's free market reforms that rescued the almost bankrupt nation from economic collapse. He was also commonly referred to as the Chanakya of modern India for his ability to steer tough economic and political legislation through the parliament at a time when he headed a minority government.

Rao's term as Prime Minister was an eventful one in India's history. Besides marking a paradigm shift from the industrializing, mixed economic model of Nehru to a market driven one, his years as Prime Minister also saw the emergence of the Bharatiya Janata Party, a major right-wing party, as an alternative to the Indian National Congress which had been governing India for most of its post-independence history. Rao's term also saw the destruction of the Babri Mosquemarker in Ayodhya which triggered one of the worst Hindu-Muslim riots in the country since its independence.

Rao's later life was marked by political isolation due to his association with corruption charges. Rao was acquitted on all charges prior to his death in 2004 of a heart attack in New Delhimarker. He was cremated in Hyderabadmarker.

Early life

PV's father was P. V. Ranga Rao. He belonged to a wealthy Telugu Brahmin (6000 Niyogi) family from a village called Vangara (pedda), Bheema Devara pally mandal in the Karimnagar districtmarker of Andhra Pradeshmarker, India.

Narasimha Rao was popularly known as PV. He studied at Fergusson College and at the Universities of Mumbai and Nagpur where he obtained Bachelor's and Master's degrees in law. He could speak 17 languages including Urdu, Marathi, Kannada, Hindi, Tamil, Telugu and Oriya with a fluency akin to a native speaker. His mother tongue was Telugu. In addition to seven Indian languages, he spoke English, French, Arabic, Spanish and Persian. Along with his cousin Pamulaparthi Sadasiva Rao, PV edited a Telugu weekly magazine called Kakatiya Patrika from 1948 to 1955.

Narasimha Rao has three sons and five daughters. His eldest son P. V. Rangarao was an education minister in Kotla Vijaya Bhaskar Reddy cabinet and MLA from HanmaKonda Assembly Constituency for two terms. His second son P. V. Rajeshwar Rao was a Member of Parliament from Secunderabadmarker Lok Sabha Constituency.

Political career

Narasimha Rao was an active freedom fighter during the Indian Independence movement and joined full time politics after independence as a member of the Indian National Congress. Narasimha Rao served brief stints in the Andhra Pradesh cabinet (1962–1971) and as Chief minister of the state of Andhra Pradeshmarker (1971–1973).

When the Indian National Congress split in 1969 Rao stayed on the side of then Prime Minister Indira Gandhi and remained loyal to her during the Emergency period (1975 - 77). He rose to national prominence in 1972 for handling several diverse portfolios, most significantly Home, Defence and Foreign Affairs (1980-1984), in the cabinets of both Indira Gandhi and Rajiv Gandhi. In fact it is speculated that he was in the running for the post of India's President along with Zail Singh in 1982.

Rao very nearly retired from politics in 1991. It was the assassination of the Congress President Rajiv Gandhi that made him make a comeback. As the Congress had won the largest number of seats in the 1991 elections, he got the opportunity to head the minority government as Prime Minister. He was the first person outside the Nehru-Gandhi family to serve as Prime Minister for five continuous years, the first to hail from South India and also the first from the state of Andhra Pradesh. Since Rao had not contested the general elections, he then participated in a by-election in Nandyal to join the parliament. N.T.Rama Rao (then leader of the Chief Opposition party of Telugu Desam) did not want to put a contestant against Rao, because he was the First Prime Minister of India from Andhra Pradesh, and NTR did not want to create an obstacle on his path. By that, Rao won from Nandyal with a victory margin of a record 5 lakh (500,000) votes and his win was recorded in the Guinness Book Of World Records. His cabinet included Sharad Pawar, himself a strong contender for the Prime Minister's post, as defence minister. He also broke convention by appointing a non-political economist and future prime minister, Manmohan Singh as his finance minister.


Economic reforms

Rao's major achievement generally considered to be the liberalization of the Indian economy. The reforms were adopted to avert impending international default in 1991. The reforms progressed furthest in the areas of opening up to foreign investment, reforming capital markets, deregulating domestic business, and reforming the trade regime. Rao's government's goals were reducing the fiscal deficit, Privatization of the public sector, and increasing investment in infrastructure. Trade reforms and changes in the regulation of foreign direct investment were introduced to open India to foreign trade while stabilizing external loans. Rao's finance minister, Manmohan Singh, an acclaimed economist, played a central role in implementing these reforms.

Major reforms in India's capital markets led to an influx of foreign portfolio investment. The major economic policies adopted by Rao include:

  • Abolishing in 1992 the Controller of Capital Issues which decided the prices and number of shares that firms could issue.

  • Introducing the SEBI Act of 1992 and the Security Laws (Amendment) which gave SEBI the legal authority to register and regulate all security market intermediaries.

  • Opening up in 1992 of India's equity markets to investment by foreign institutional investors and permitting Indian firms to raise capital on international markets by issuing Global Depository Receipts (GDRs).

  • Starting in 1994 of the National Stock Exchange as a computer-based trading system which served as an instrument to leverage reforms of India's other stock exchanges. The NSE emerged as India's largest exchange by 1996.

  • Reducing tariffs from an average of 85 percent to 25 percent, and rolling back quantitative controls. (The rupee was made convertible on trade account.)

  • Encouraging foreign direct investment by increasing the maximum limit on share of foreign capital in joint ventures from 40 to 51 percent with 100 percent foreign equity permitted in priority sectors.

  • Streamlining procedures for FDI approvals, and in at least 35 industries, automatically approving projects within the limits for foreign participation.

The impact of these reforms may be gauged from the fact that total foreign investment (including foreign direct investment, portfolio investment, and investment raised on international capital markets) in India grew from a minuscule US $132 million in 1991-92 to $5.3 billion in 1995-96.
Rao with Tamil Nadu Chief Minister M.
Ramachandran in 1987.
Rao began industrial policy reforms with the manufacturing sector. He slashed industrial licensing, leaving only 18 industries subject to licensing. Industrial regulation was rationalized.

National security, foreign policy and crisis management

Rao energized the national nuclear security and ballistic missiles program, which ultimately resulted in the 1998 Pokhran nuclear testsmarker. It is speculated that the tests were actually planned in 1995, during Rao's term in office, and that they were dropped under American pressure when the US intelligence got the whiff of it. Another view was that he purposefully leaked the information to gain time to develop and test thermonuclear device which was not yet ready. He increased military spending, and set the Indian Army on course to fight the emerging threat of terrorism and insurgencies, as well as Pakistanmarker and China'smarker nuclear potentials. It was during his term that terrorism in the Indian state of Punjabmarker was finally defeated. Also scenarios of plane hijackings, which occurred during Rao's time ended without the government conceding the terrorists' demands. He also directed negotiations to secure the release of Doraiswamy, an Indian Oil executive, from Kashmiri terrorists who kidnapped him, and Liviu Radu, a Romanian diplomat posted in New Delhimarker in October 1991, who was kidnapped by Sikh terrorists. Rao also handled the Indian response to the occupation of the Hazratbal holy shrine in Jammu and Kashmirmarker by terrorists in October 1993. He brought the occupation to an end without damage to the shrine. Similarly, he dealt with the kidnapping of some foreign tourists by a terrorist group called Al Faran in Kashmir in 1995 effectively. Although he could not secure the release of the hostages, his policies ensured that the terrorists demands were not conceded to, and that the action of the terrorists was condemned internationally, including by Pakistan.

Rao also made diplomatic overtures to Western Europe, the United States, and China. He decided in 1992 to bring into the open India's relations with Israelmarker, which had been kept covertly active since they were first established by Indira Gandhi in 1969 , and permitted Israel to open an embassy in New Delhi. He ordered the intelligence community in 1992 to start a systematic drive to draw the international community's attention to alleged Pakistan's sponsorship of terrorism against India and not to be discouraged by US efforts to undermine the exercise. Rao launched the Look East foreign policy, which brought India closer to ASEAN. He decided to maintain a distance from the Dalai Lama in order to avoid aggravating Beijing's suspicions and concerns, and made successful overtures to Tehranmarker. The 'cultivate Iranmarker' policy was pushed through vigorously by him. These policies paid rich dividends for India in March 1994, when Benazir Bhutto's efforts to have a resolution passed by the UN Human Rights Commission in Geneva on the human rights situation in Jammu and Kashmir failed, with opposition by China and Iran.

Rao's crisis management after the March 12, 1993 Bombay bombings was highly praised. He personally visited Bombay after the blasts and after seeing evidence of Pakistani involvement in the blasts, ordered the intelligence community to invite the intelligence agencies of the US, UK and other West European countries to send their counter-terrorism experts to Bombay to examine the facts for themselves.

Challenges faced in office

Economic crisis and initiation of liberalization

Rao decided that India, which in 1991 was on the brink of bankruptcy, would benefit from liberalizing its economy. He appointed an economist, Dr. Manmohan Singh, a former governor of the Reserve Bank of Indiamarker, as Finance Minister to accomplish his goals. This liberalization was criticized by many socialist nationalists at that time.

Currency crisis

During the early 1990s, Rao's administration failed to arrest the 91 per cent fall in the value of the Indian Rupee from 17 to 32 to the US Dollar due to haphazard credit policies.

Rise in separatist movements

Ethnic militancy and separatism saw a rise in India spreading into the northeastern states of Assammarker, Tripuramarker and Nagalandmarker. during Rao's tenure, based around Ethnic lines. The United Liberation Front of Asom was responsible for the increased militancy in Assammarker after Direct Peace talks had failed with the Central Government at Delhi .

Meanwhile The Himalayanmarker state of Jammu and Kashmir witnessed a separatist insurgency.Congress government claimed that training camps in Pakistanmarker-administered Kashmirmarker for militant groups, previously directed at evicting the Soviet army from Afghanistan, were now producing the same fighters who were infiltrating Kashmir. He directly charged Pakistan with sheltering, arming and supplying infiltrators. During this time Hindu pilgrims and Sikh settlers were attacked, and hundreds of thousands of Kashmiri Pandits were forced to leave their homes in the Kashmir valley. Violence rocked and shut down parts of Kashmir, which was heavily dependent on tourism, and also struck major cities like Delhimarker and Mumbai.

Rao's government introduced the Terrorist and Disruptive Activities Act (TADA), India's first anti-terrorism legislation, and directed the Indian Army to eliminate the infiltrators. Despite a heavy and largely successful Army campaign, the state descended into a security nightmare. Tourism and commerce were largely disrupted. Special police units were often accused of committing atrocities against the local population, Rape, kidnapping, torture and detention under false accusations.

see also Separatist movements of India

Babri Mosque riots and the Latur earthquake

See also: Ayodhya debate

Members of the VHP demolished the Babri Mosquemarker (which was constructed by India's first Mughal emperor, Babar) in Ayodhyamarker on 6 December 1992. The site is believed by Hindus to be the birthplace of the Hindu god Rama and is believed by the Hindu Community to be a place of a Hindu temple created in the early 16th century. The destruction of the disputed structure, which was widely reported in the international media, unleashed large scale communal violence, the most extensive since the Partition of India. Hindus were indulged in massive rioting across the country, and almost every major city including Delhi, Mumbai, Kolkatamarker, Ahmedabadmarker, Hyderabadmarker, Bhopalmarker struggled to control the Unrest.A strong earthquake in Laturmarker, Maharashtramarker, also killed 10,000 people and displaced hundreds of thousands in 1993.  Rao was applauded by many for using modern technology and resources to organize major relief operations to assuage the stricken people, and for schemes of economic reconstruction.

Corruption scandals

The most negative aspects, though none of them turned out to be true, of Rao's legacy were his direct and indirect associations with various corruption charges. These charges were, for the most part, viewed as fuelled by those in his party who were opposed to his return as a major player again. Some of the more prominent examples were:

In July 1993, Rao's government was facing a no-confidence motion, because the opposition felt that it did not have sufficient numbers to prove a majority. It was alleged that Rao, through a representative, offered millions of rupees to members of the Jharkhand Mukti Morcha (JMM), and possibly a breakaway faction of the Janata Dal, to vote for him during the confidence motion. Shailendra Mahato, one of those members who had accepted the bribe, turned approver. In 1996, after Rao's term in office had expired, investigations began in earnest in the case.

In 2000, after years of legal proceedings, a special court convicted Rao and his colleague, Buta Singh (who is alleged to have escorted the MPs to the Prime Minister). Rao appealed to a higher court and remained free on bail. The decision was overturned mainly due to the doubt in credibility of Mahato's statements (which were extremely inconsistent) and both Rao and Buta Singh were cleared of the charges in 2002.

Rao, along with fellow minister K.K. Tewary, Chandraswami and K.N. Aggarwal were accused of forging documents showing that Ajeya Singh had opened a bank account in the First Trust Corporation Bank in St. Kittsmarker and deposited $21 million in it, making his father V.P. Singh its beneficiary. The alleged intent was to tarnish V.P. Singh's image. This supposedly happened in 1989. However only after Rao's term as PM had expired in 1996, was he formally charged by the CBI for the crime. Less than a year later the court acquitted him due to lack of evidence linking him with the case. All other accused, Chandraswami being the last, were also eventually acquitted.

Lakhubhai Pathak, an Indian businessman living in England alleged that Chandraswami and K.N. Aggarwal alias Mamaji, along with Mr. Rao, cheated him out of $100,000.00. The amount was given for an express promise for allowing supplies of paper pulp in India, and Pathak alleged that he spent an additional $30,000.00 entertaining Chandraswami and his secretary. Rao and Chandraswami were acquitted of the charges in 2003, due to lack of evidence. Despite this, it remained a large black mark on Rao's administration.

Later life

In the 1996 general elections Rao's Congress Party was badly defeated and he had to step down as Prime Minister. He retained the leadership of the Congress party until late 1996 after which he was replaced by Sitaram Kesri. According to Congress insiders who spoke with the media, Rao had kept an authoritarian stance on both the party and his government, which led to the departure of numerous prominent and ambitious Congress leaders during his reign. Some of them were: Narayan Dutt Tiwari, Arjun Singh, Madhavrao Scindia, Mamata Banerjee, G.K. Moopanar and P.Chidambaram.

Rao rarely spoke of his personal views and opinions during his 5-year tenure. After his retirement from national politics Rao published a novel called The Insider (ISBN 0-670-87850-2). The book, which follows a man’s rise through the ranks of Indian politics, resembled events from Rao’s own life. (See Gonzo journalism.) Rao, however denied any connection.

Rao suffered a heart attack on 9 December 2004, and was taken to the All India Institute of Medical Sciences where he died 14 days later at the age of 83.

He was cremated with full state honours. His body was kept in state at the Jubilee Hall in Hyderabadmarker. His funeral was attended by the incumbent Prime Minister Manmohan Singh, former Prime Minister H. D. Deve Gowda, the incumbent BJP president L.K. Advani, the Defence Minister Pranab Mukherjee, the Finance Minister P. Chidambaram and many other dignitaries.


  • Rao picked conservative BJP leader Atal Behari Vajpayee to represent India in a debate on disarmament at the United Nations. Although they were political opponents, Vajpayee's pro-nuclear stance was in accordance with Rao's own views. Vajpayee later became the Prime Minister.

  • He was a cartoonists delight with his trademark pout being one of the focused points.

  • According to Vajpayee, when he became the PM in 1996 Rao handed him a piece of paper which simply stated Bomb is ready. You can go ahead. (referring to a nuclear device) and asked that it should not be made public. Vajpayee revealed this only after Rao's death.

  • The Express Highway between Sarojini Devi Eye Hospital and Aramgarh on NH 7 to the International Airport in Hyderabadmarker is named after Rao.


  • "When I don't make a decision, it's not that I don't think about it. I think about it and make a decision not to make a decision."
  • "Inaction is also an action."
  • "Law will take its own course of action."
  • "Time itself is the solution to some problems."


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